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Accounting firms should be credible to pay stockholders if they give a comp each a flow canvass and it goes bankrupt at bottom a yearThe important principle in line line that makes the merged fashion model such(prenominal) a no-hit credit line entity is the detail that the potbelly itself enjoys a personality that is fall apart and distinct from that of the members of the corporation and that of the stockholders . nevertheless in cases where the signalise incarnate existence of the business has been utilize to perpetrate twaddle or been fiction perforate and these separate individuals are made credible for the acts of the club . qualification draw firms probable to the stockholders for the bankruptcy of a company inviteable to a supposedly clean audit antecedently issued disregards one and only(a) of the main principles of business and disregards the corporate fiction that was created by natural virtue . This indebtedness provides the stockholders with the safety net of world able to collect from the err accounting firm instead of the corporation who is the literal hurt party in this character . If there should be any entity that must be afforded shield , it is the company itself that relied upon the presumptively awry(p) auditing of the accounting firmHolding accounting firms liable to pay stockholders whenever a company goes bankrupt after the run of a clean audit also disregards one of the elements of callable process which the faithfulness provides to entertain all entities including juridical entities such as corporations and accounting firms .

The financial obligation here arises from the automatic self-assertion that accounting firms subscribe fraudulently issued clean audits to the demise of not only the at erstwhile bankrupt corporation however the stockholders as well . This is a presumption that cannot hold directly and it has been consistently ruled by the Supreme Court that fraud is a serious allegement that must be turn up and cannot be assumedWhile there is sure as shooting a need to run through new measures to address the devil of accounting fraud and to nurture the stockholders from such acts , the breaking of the law and the business principles that have organize the foundation of most , if not all , of the financial proceedings is not the way of doing it . veer methods such as the broadside of a bond in case of fraudulent audits or similar penalties can be explored and perhaps implemented be Page PAGE 2 of NUMPAGES 2...If you want to get a full essay, order it on our website: Ordercustompaper.com

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